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Employment tribunal claims

August 6th, 2013

The 29 July 2013 saw significant changes to employment law rules being implemented; the most noteworthy of which was the introduction of Tribunal fees.

Prior to 29 July 2013, a claimant could issue an Employment Tribunal claim without having to pay any fees. This was of course a little out of sync with the County Court system whereby issue and hearing fees are charged depending on the value of the claimant’s claim. Perhaps it is right that claimants be expected to put forward some money to bring their claims – apart from anything else, it shows they probably have a genuine belief in their claim if they are prepared to pay to be allowed to bring the claim in the first place. I accept the argument that the introduction of Employment Tribunal fees will probably help to reduce the number of vexatious claims being brought before the Employment Tribunal, and that is certainly a good thing for businesses and the overburdened Employment Tribunal system.

Despite this obvious benefit, I have two principal concerns with the fees that have been introduced: firstly the level of the fees and secondly, the potential non-recoverability of them.

Since 29 July 2013, to bring a “type 1” claim in the Employment Tribunal, such as a claim for statutory redundancy pay or unlawful deduction of wages, a claimant has to pay a £160 fee upon issue and then a £230 hearing fee (a total of £390 if the claim does not settle prior to the nearing of the hearing date). To bring a “type 2” claim, such as a claim for unfair dismissal or discrimination, a claimant has to pay a £250 issue fee followed by a £950 hearing fee (a total of £1,200 if the claim does not settle prior to the nearing of the hearing date). Some low earning claimants will be entitled to a fee “remission,” but I imagine a large proportion of claimants will not meet the necessary requirements and so will be forced to either pay the fees, or drop their claims.

These fees seem extraordinarily high, particularly when Employment Tribunal claimants have often recently lost their jobs. To put the sums into perspective, you need to be on an annual salary of just below £18,000 to have a net monthly income of £1,200. Whilst the introduction of the fees was intended to prevent disingenuous claimants from bringing a claim, I cannot help but wonder how many employees will be prevented from bringing their genuine and valid claims to the Employment Tribunal, because they cannot afford the fees yet do not qualify for a fee remission. Justice in the Employment Tribunal should not only be available to the country’s higher earners.

The general rule in the Employment Tribunal is that costs are not generally recoverable by the winning party. Costs are only recoverable if a party succeeds in obtaining a costs order against the other party, and this is exceedingly rare. With the introduction of the new fees, this rule has not changed and it is yet to be seen how Employment Tribunal judges will deal with requests from claimants to have their fees reinbursed if successf. For now, it has to be assumed that it is therefore unlikely that a winning claimant will be able to recover the £390 or £1,200 in fees they had to pay out to take their claim to a final hearing. This does not therefore follow the County Court system, which provides for Court fees being recoverable from the losing side, even in small claims (low value) matters. This does not seem just or equitable, and my concern is that it may discourage settlement of the claim prior to the hearing if the parties cannot reach an amicable agreement on who should pay for the fees that have been paid.

Will the introduction of fees mean that claimants become more determined not to settle their claims but to proceed to the final hearing and take their chances with the Judge? If so, this will surely lead to an increase in the number of claims proceeding to a final hearing and simply increase the burden on the Employment Tribunals in terms of workload and costs. Is the introduction of these high fees likely to create more work for Employment Tribunals, rather than less? And is the Employment Tribunal system likely to require more from the public purse, rather than less, as was the intention in introducing these fees? Only time will tell.